WS #13358

Markets are in a strong risk-on mode following Trump's decision to hold off on Iran strikes and pursue talks, with the Dow closing at a record high and oil prices tumbling ~5%. This de-escalation narrative is corroborated across multiple sources (CNBC, Reuters, AP, GDELT) and is the dominant driver. However, a key counter-signal emerged: Iran denies any direct talks with the US, and a senior advisor warned of risks to US forces, ruling out alternative shipping corridors. This suggests the de-escalation may be fragile, and oil's decline could reverse. Additionally, 25 states have sued the Trump administration over the latest tariffs, a legal challenge that could reintroduce trade uncertainty. In earnings, Palantir and Snap posted strong beats, driving after-hours gains, while Onsemi guided upbeat on AI chip demand. Big Tech's earnings are being flattered by investment gains from AI stakes (Microsoft, Amazon, Alphabet), which could lead to downward revisions when stripped out. The prevailing narrative is ESCALATING in risk appetite but with underlying geopolitical and legal risks that could quickly shift sentiment.